Inside Tribune Newsrooms, Assurances of 'Business as Usual'; Outsiders Worry More Trouble to Follow

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Editor&Publisher: Inside Tribune Newsrooms, Assurances of 'Business As Usual' -- as Outsiders Worry More Trouble Will Follow
By Mark Fitzgerald and Jennifer Saba
Published: December 08, 2008

CHICAGO As word of Tribune Co.’s bankruptcy filing reached the Chicago Tribune newsroom Monday, there were constant reassurances from management that things sounded worse than they are. “They’re telling us, it’s business as usual,” said one journalist. “As long as we’re making money, we’ll get out of this."

That was Tribune Chairman and CEO Sam Zell’s message, too, in a long memo to employees that blamed the financial fix that led to the Chapter 11 filing on a “perfect storm, to say the least.” “Most importantly, I want to stress that we will continue to operate our business as usual,” Zell wrote. “That includes meeting payroll and covering benefits (such as healthcare, disability and others), and paying vendors for all goods and services they provide to us going forward.”

But outside the newsrooms of Tribune’s sprawling media business, observers saw the bankruptcy filing as a chilling harbinger of financial failure that could spread well beyond Tribune Tower. “Companies operate under Chapter 11 often, it’s not unusual,” said Lauren Rich Fine, the former Merrill Lynch stock analyst now at Kent State University’s journalism school. “Its not usual for companies to come back out again. What’s challenging here is there’s a feeling there are other newspaper companies on the brink. Look how their stocks are trading....Fine said if she were a Tribune employee, “I would be very worried about the ESOP (employees stock ownership plan).”...
Alan Mutter, the San Francisco-based consultant who writes the widely followed industry blog Reflections of a Newsosaur....(also) thinks the bankruptcy portends bad news for other heavily indebted chains. “The outlook is not great for newspaper advertising,” he said. “As bad as everybody thought it was going to be, it’s actually worse … Absent this debt load, is it a stable growing business? It's not. You kind of have to wonder what do you do here?”...

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